U.S. Labor Department Sues Texas Firm and Executives for Failing to Remit $65,337 to Retirement and Health Plans

Archived News Release — Caution: Information may be out of date.

El Campo, Texas - The U.S. Department of Labor has sued El Campo-based Mark’s Machine Co. Inc. and its owners for failing to timely remit $65,337 in employee contributions to the company’s retirement plan and employee premiums to the health plan insurance carrier as required by the Employee Retirement Income Security Act (ERISA).

“Our action in the Mark’s Machine Company case affirms the department’s commitment to protect the hard-earned benefits of America’s workers,” said Roger Hilburn, director of the department’s Dallas regional office of the Employee Benefits Security Administration (EBSA), which investigated this case.

Mark and Kay Pratka, who were owners and plan trustees, allegedly failed to remit $58,383 in employee withholdings to the company’s employee stock ownership plan from January to December 2003 in a timely manner, and to remit $6,953 in employee health plan contributions to the insurance carrier from July to September 2003.

The lawsuit, filed in U.S. District Court for the Southern District of Texas in Houston, is seeking to restore plan assets and lost opportunity costs and bar the Pratkas from serving any ERISA-covered plan in the future other than Mark’s Machine Co. The suit also orders the defendants to restore to the plans all profits made through the use of plan assets.

Mark’s Machine Company provides repair and manufacturing services to clients involved in the petrochemical, oilfield and offshore industries. The plan had 54 participants and held assets totaling $1,145,097.

Employers with similar problems, who are not yet the subject of an investigation by EBSA, could be eligible to participate in the department’s Voluntary Fiduciary Correction Program (VFCP). Participation in the VFCP requires employers to make workers whole, but allows them to avoid EBSA enforcement actions and civil penalties, as well as excise taxes. For more information about the VFCP, see www.dol.gov/ebsa.

In fiscal year 2005, EBSA achieved monetary results of $1.7 billion related to pension, 401(k), health and other benefits for millions of American workers and their families. Employers can contact the Dallas regional office at 214.767.6831 or through EBSA’s toll-free number at 1.866.444.EBSA (3272), for help with problems pertaining to private-sector retirement and health plans.

(Chao v.Mark’s Machine Co.) Civil Action No. 4:06-cv-01593

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Archived News Release — Caution: Information may be out of date.

Contact Name: Diana Petterson/Elizabeth Todd
Phone Number: 214.767.4776 ext. 222 or 221